10 Ways to Reduce Direct Marketing Costs, Save Your Company and Look Like a Superstar!

While our economy is showing some signs of life, still most people I know are freaked out, totally stressed; and terrified of losing their jobs, homes and more.

It has been tough out there for direct and multichannel marketers.

But all isn’t bad. I swear!

There’s an amazing opportunity in all of this chaos to streamline your business, strip away the dead wood in your budgets and be a rock star in your company.

Here are 10 steps to help you get started:

1. It’s time to renegotiate everything. Start with your key area’s of business — printing, mailing, lists, creative, prepress (oops, I meant premedia).

2. Do a print review. Have your printer bid against other printers. I did this for a turnaround I worked on and was able to reduce printing costs by 20 percent. (Seems my predecessor was asleep at the wheel.)

3. Tweak your catalog’s trim size or basis weight. You may find some cost savings there.

4. Co-mail! This can reduce your postage costs.

5. Take advantage of destination-entry discounts. (Ask your printer about what this and co-mailing entail, and what you can save. Or e-mail me and I’ll explain.)

6. List brokers are offering discounts and test pricing for mail files. Ask and you shall receive.

7. Look for more list exchanges. These can be had for run charges, a fraction of the rental fee.

8. Use the co-op databases, such as I-Behavior, Abacus and NextAction. They’ll model your customers and rent you prospect names for less than list rentals.

9. Do your matchbacks. Make sure you’re analyzing your mailings the best and most accurate way possible.

10. Run NCOALink, merge/purge and other list hygiene products before each mailing. I had a client who had the same name on his database six times. Waste of money! You only need one instance of a name to mail it. Find yourself a great service bureau to steer you to savings.

In two weeks I’ll give you 10 more ways to save money and reach superstar status. In the meantime, if you need any clarifications on these or any other ways to save money, let me know and I’ll work your answer into my next column.

Hang in there!

Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can post a comment here or e-mail him at jimdirect@aol.com.

Another Year, Another Catalog Conference, Another Dog-and-Pony Show, Another Thank You!

It’s that time of year again, readers. Catalog conference time — or to be more precise, Annual Conference for Catalog and Multichannel Merchants (ACCM) time. This year it’s in New Orleans., and despite that love New Orleans and the music especially, once again I’m not going. 

I had planned to go this year. I even set up some meetings. But then some other meetings took precedence. Truth is, however, I have mixed feelings every year about going.

What I love most about going to the ACCM and other direct marketing events is the camaraderie I feel with industry peers. To me, it’s a chance to reconnect with people I normally don’t get to see throughout the year.

Oddly enough, the people I’ll miss the most are the vendors I’ve worked with over the years. These are the people who’ve allowed me to do my job to the best of my abilities. I truly believe that the job of a direct marketer is just as much externally focused, if not more, as it is internally. 

While I’m internally responsible for my objectives and my team, it’s the vendors I choose that can make or break how the results turn out. These folks have saved me more times than I care to recall. They’ve turned me into a hero by keeping my costs in line, met some ridiculously short deadlines at times, found solutions for me that I thought didn’t exist and even played catalog psychotherapist. 

And they get very little credit for this. This is why I believe in the term “vendor-partners,” and this week, I salute them.

So to all the people in the printing, design, premedia, service bureau, co-op databases, list brokerages, etc., I’d like to use this forum to thank you for your service and your friendship. (You know who you are.)

As you’re standing on your feet all day at the conference, doing the dog-and-pony show, know that when the parties are over and your bones are aching, what you do makes us better at what we do!

On another note, the thing that I dislike about the big conferences in general is the fact that you’re bombarded with information in a super-short period if time. Some people can do “speed learning.” Personally, I can’t. I like my information and my instructions meted out in slower, smaller increments.

So if you’re not at the conference this year (or even if you are), feel free to continue reading my blog. Certainly this Website and Catalog Success magazine are great learning resources for you.

Three Ways to Cut Customer Acquisition Costs

A few weeks ago, I discussed some powerful resources for finding obscure mailing lists that may not be on the traditional list rental market. This week, let’s take these resources a step further. 

With response rates down and expenses up, now is a great time for you to look at alternative ways to acquire customers and even lower your customer acquisition costs. Again, the resources are:

* Belcaro Shop at Home (www.shopathome.com)

* Catalogs.com (www.catalogs.com)

* Greyhouse publishing (www.greyhouse.com/marketing.htm)

One other method I didn’t mention last week is through magazines that target your particular niche. You’d be surprised at how many other companies there are out there with products that have an affinity to yours and that would be open to a marketing partnership.

Here are some examples of the types of programs you can set up with other catalogers:

1. List exchanges. The most obvious way is to exchange housefile names (both offline and online). This will eliminate most of the cost of renting those names. To keep things running smoothly, once you work out your arrangement with the other list owner, you can have your list broker work this like a regular list order. Your broker will charge you a nominal fee for this, called an exchange rate.

2. Package inserts. Trading off space in outbound package inserts can be an excellent source of both leads and orders. Just like paid-package insert programs, set up tracking codes and test creative and offers. For offers, try testing a catalog request vs. a direct sale of a hybrid of each. As for finding companies to trade with, use the above-mentioned sources. Or, your list broker can help you make contact with the list owners of some of the lists you rent (ones that don’t already have a package insert program running).

3. Endorsed deals. Endorsements allow you to provide your customers with items that are complimentary to your products, thus creating goodwill. Endorsement programs can be as simple as sending out an e-mail or postcard to your customers with a recommendation, or as complex as elaborate syndication programs with revenue sharing. How you structure your deal is dependent on what you and the other marketing team can dream up.

Some other ideas include a store within a store, trading pages within your respective catalogs, or selling other marketers’ products on your Web site and vice versa. The sky’s the limit here. Other Considerations Do your due diligence on the company you’re considering partnering with. Carefully review its Web site, product offerings, customer service, etc. Make sure your potential partner company’s quality is of the same level as yours.

Also, structure these types of partnerships as any other test. Use the smallest possible circulation/sample to test the waters before rolling out.

I had a client once who thought he had a slam-dunk co-marketing program. The other company offered his company a free test of 50,000 names. After much back and forth, I convinced his company to mail only 5,000 names. Good thing. The test bombed! And by mailing one-tenth as many names in the test, his company lost far less than it could have. Two words: Be careful!

CONsultant, PROsultant, or INsultant Pt. 2, how to choose the best strategic mentor for your direct marketing business.

Many years ago, after I was downsized from my job and I started consulting, my kids gave me a T-shirt that read, “I’m not unemployed … I’m a consultant!

Ain’t that the truth!

With that bit of humor I start part two of my column about finding the right direct marketing consultant for your business. (For part 1, click here.) Many budding consultants get their starts after downsizing. And in this economy, many consultancies are springing up as more and more good marketing people are let go from their jobs.  

I’m not saying that hiring someone who was recently downsized is a bad thing. In fact, I strongly believe that in some cases you can benefit more from a consultant who has recent client-side experience than you can from a seasoned consulting vet. Think about it this way: New-to-consulting practitioners can be more about implementation than older consultants who are more adept at the theoretical side of things.  

The counterpoint to that is seasoned consultants are used to looking at the big picture and, in many cases, have experience with a broad range of companies.

You also should know that many consultants experience feast or famine business cycles — too many or too few clients. And yours truly is no exception. Since I started my consulting practice in 1999, I’ve been hired three times by clients to work on a full-time basis. All but once I’ve managed to keep up some sort of client roster when I’ve worked on the client side. Companies are fickle (especially here in Florida), particularly toward marketing personnel.  

A continual diet of client-side implementation and consulting keeps me from getting out of the loop and gives me an edge.  

So how do you pick the right consultant for your business? It’s a lot like choosing an employee: Do your due diligence as best as you can, and then roll the dice. You can look at the basics, such as who they worked for in the past, but as usual, I deliver you some food for thought beyond the basics.

That said, here are some more tips for you to consider:

1. If a consultant is too agreeable, he or she may be in it only for the money. Find a consultant who disagrees with you a lot. Most of the time, consultants are brought in to fix problems that exist within an organization that can’t be fixed internally. It’s a pair of fresh eyes to look things over. Consultants are like plumbers — the good ones are trained to instantly spot where the “clogs in the pipes are,” and then to fix it efficiently. You wouldn’t tell a plumber how to unclog your pipes, would you? You have to assume that you’re going to hear a lot of things you don’t want to hear and/or disagree with. Otherwise, why would you need a consultant to begin with?
2. Find a consultant who’s willing to walk away if you don’t listen. Here’s a true story: I worked with a catalog company whose general manager refused to understand the way catalog marketing worked. This employee came from retail and insisted on running the company like a brand. He pumped a lot of money into the catalog, doubled the unit cost in the mail and then when his mailings weren’t profitable, tried to repeat the same mistake in his heaviest selling season.

After repeatedly explaining the reasons for what happened, I finally gave up and said the following:

“Mr. X, what’s your favorite sport?”
“Football, why?”
“Because you’re running your business like you’re on a football field, playing with a hockey stick and puck! And if you keep doing it your way, you’re going to be out of business in six months.”

At that point, the client turned red, and steam started to come out of his ears. Within the next few weeks we mutually terminated my consulting contract. The kicker: Less than nine months later the business went belly-up.

3. References are ludicrous. Let’s put something to bed right now. The whole concept of asking for references is about patting yourself on the back. I don’t know of one consultant or, for that matter, ANYONE who knowingly would give a prospect a BAD reference. The only value in getting references is that when something goes wrong, you can at least feel justified that you did your due diligence.

4. If you want references, look them up on LinkedIn. There’s a “search reference” function that can help you find past employers, clients, among others. Also, see if they have a lot of recommendations on their profile pages.

How To Create Catalog Split Test Scenarios That Matter (part 2)

This week in the final installment of this two-part series on the value of creating mail tests that produce measurable, and telling, results for your catalog, I provide takeaway lessons from last week’s example of how one catalog company tested the profitability of using an upgraded paper stock in its catalog. I’ll also list some tips to help ensure your company is conducting productive mail tests. 

The Moral of the Story
Even scientific tests often succumb to the subjective. Once all of your scientific testing is done, the art of interpreting the data takes over. Returning to last week’s example, as a direct marketer I never would’ve rolled out the higher-grade paper without additional testing. I would’ve wanted to confirm my results by running the same test over again. Even if the test were a runaway success, I would’ve proceeded cautiously. 

In the catalog/multichannel industry, there are infinite varieties of tests that can be configured, measured and, ultimately, interpreted. 

So how do you become successful and improve your company via testing? I believe the following seven principles, that if adhered to, will allow you to hedge your bets.

1. Always test against something. Your current catalog, e-mail, Web site, merchandise, among other things, can be used as your control. 

2. Always create a testing hypothesis. Use this example: If we do X, we expect Y to occur. 

3. Always set up logical tests based on scientific principles.

4. Test only one variable at a time. If you test more than one, you’ll never know which variable made the difference. See below for a list of variables you can test.

5. Always do your math up front. Calculate all expenses in advance of the test and set up a pro forma profit and loss and break-even analysis. 

6. Always do the math on the back end. Before the creative side of testing begins, have the math in front of you. Many times the numbers will drive decisions. 

7. Always test until you’re satisfied. Don’t roll out any changes to your catalog unless you’re certain of the outcome through testing, retesting and further testing. 

Variables You Can Test Today (a checklist to get you started)

List Variables:

* Recency — the most recent names from a new list; if your list is “working”; older segments of the list; average order sizes.

* New lists in your product category.

Creative and Printing Variables:

* Paper, trim size, pages, formats, photography, copy, ink-jet messages, cover versions, dot whacks, inserts.

Offer Variables:

* Gift with purchase, dollar or percentage off, free shipping.

Merchandising Variables:

* New or different products; repositioning older or non best-sellers via creative execution.

The most basic direct and catalog marketing fundamentals (to learn and re-learn)

I recently had a conversation with another catalog consultant about a client proposal we’re jointly working on. The conversation worked its way to a discussion on the basic fundamentals of direct marketing. In essence, what’s the most basic fundamental of direct marketing that we need to present and our clients need to follow?

It came down to this: the 40/40/20 rule.

This rule states that in order to be successful in direct marketing, you must do the following:

  1. Concentrate 40 percent of your efforts on lists. That means list analysis and planning, selection, RFM, and, most importantly for catalogers, circulation.
  2. Concentrate an additional 40 percent on your offer. For catalogers, that means merchandising. That requires expert attention to detail, including but not limited to product selection, pricing, presentation and analysis. By analysis, I’m referring to square-inch analysis, the most powerful tool you can use to manage your catalog merchandising — aka “squinch.” Understanding the wants and needs of your customers is part of this function, as are the offers you make to them to stimulate response.
  3. Tie it all together by spending 20 percent of your efforts on creative execution. Literally, creative execution is only one thing: the bringing together of your list and offer/merchandising efforts in such a way that it speaks “buy now” to your customers.

As a consultant, I almost always see this in reverse.

If I had to quantify what I see in clients as they apply the above core competencies, it would be these three:

  1. 50 percent merchandising, with less emphasis on analysis and more on product development and presentation;
  2. 30 percent on creative. The creative (i.e., the catalog) is the brand’s calling card;
  3. and 20 percent on lists.

In the catalog business, lists and all that circ stuff are just as important (some would even say more) than offer and creative.

It’s easy to see how that could happen. Most catalogers are merchants first. They had a product idea and brought that to market. How they bring it to market is all about building brand image. It’s as simple as that.

I usually get called in when there are some business issues that need addressing. Often I’m told that there’s a problem with their catalogs. To this I say, “The catalog (or direct mail piece) isn’t the problem; you’re trying to solve a marketing problem (translation: circ and merchandising analysis) with a creative (design, look, feel, brand) solution.

At that point, I review the client’s version of the 40/40/20 rule and then the “textbook” version. There’s plenty of evidence for the proper application of the rule in the direct marketing textbooks. Absent this principle, I’ve seen some horribly ugly catalogs that are cash cows, while beautiful catalogs sink like stones.

Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can post a comment here or e-mail him at jimdirect@aol.com. You can also follow Jim on Twitter at www.twitter.com/gilbertdirect. Read Jim’s personal blog at https://gilbertdirectmarketing.wordpress.com/.

NCDM 2008 Recap: The Key Concepts All direct Marketers Must Know!

Having attended many of the sessions and keynotes at the 2008 National Center for Database Marketing (NCDM) conference in Kissimmee, Fla., last week, I came away with three key points that proved to be the overriding themes of the three-day event.
1. Know me and be relevant. During the first day’s keynote speech, Tom Boyles, SVP of global customer managed relationships for the Walt Disney Co., posited that relevance isn’t enough anymore. Disney achieves true one-to-one communication by connecting and engaging its customers and prospects emotionally to its products.
To achieve this, Disney’s taken its databases and developed what it calls a “real-time automated decision engine,” which drives its campaigns and all contact between its customers (who are called “guests”) and its staff and brand.
Disney strives for, and achieves, a high level of personalization in its marketing messages and customers’ experiences by collecting data at basically any and all contact points. It then uses that data to create specialized to-dos, maps, DVDs, welcome mailers and other things relevant to past behavior in sync with the actual life stages of its guests.


Let me know you enjoyed this article, or feel free to add something I have missed.  Go ahead, post a comment below

2. Engagement is the new black.
If there were a single concept to rise to the top this year, it would be the idea of engagement. As with Disney, all companies to some extent try to use their data to effectively engage their prospects and customers better.
Additionally, many companies now embrace blogs; viral campaigns; and other social media outlets such as Twitter, LinkedIn and Facebook more than ever before. Some are succeeding, but it became clear that this emerging “technology” has some pitfalls — negative comments resulting in brand degradation to name one — along with benefits.
One thing is certain: While it’s possible to track ROI for social media through clicks, visits and even downstream orders, the measurement of engagement (and engagement itself) is something that hasn’t been mastered yet.
In essence, social media became a “player” this year.
3. Triggered campaigns offer the promise of one-to-one communication. In a case study session hosted by Bernice Grossman, principal consultant and founder of the database marketing consulting firm DMRS Group, three database marketing companies were given the challenge of how to send the “right response to the right person at the right time,” using modern campaign management “best-in-breed” solutions.
The companies — Alterian, smartFOCUS and Unica — showed, in real time while logged into their applications, the ease of use in developing triggered campaigns to both prospects and customers in a sort of “set it and forget it” manner. The triggered campaigns were based upon names on the file meeting certain criteria on a rolling basis (e.g., the last six months) in underperforming segments.
Each company in the “showdown” was given a dummy database that included contact and transactional information, along with gender and date of birth. From there the companies showed the audience how they used their solutions to create segmented, multiwave campaigns including birthday cards, offers and automated thank-you e-mails. The takeaway from this session was all about ease of use.

Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can post a comment here or e-mail him at jimdirect@aol.com You can also follow Jim on Twitter at www.twitter.com/gilbertdirect.

Getting the Most Out of Your Catalog Printer

Marketing via catalog can be a daunting task.  Just printing a catalog has it’s own set of core competencies that you’ll need to develop.  Here is some information you’ll need in order to start…

Getting Print Bids From Catalog Printers:

If you look at a catalog printer’s price quote, and you’re not already in the catalog business, you may be awfully confused. I know I was the first time I got a catalog print quote.

The thing is, with a catalog printer you’re not just getting a quote on printing alone. The most efficient catalog printers — and the only ones from which you should get quotes — also do the following:

* Bind the catalog and any other materials, such as an order form, together. Many times I’ve had materials printed in addition to the catalog that were bound or blown in. Most companies don’t bind in order forms anymore. However, other inserts, such as special offers for different market segments, still get bound in. Many times this printed material gets printed elsewhere and shipped to the printer for binding.

* Print the customers’ names, addresses and associated postal barcodes on the outside of the catalog and inside the order form. They also print additional messages and special offers on the outside of the catalog and the order form.

* Sort the catalogs out to take advantage of postal discounts, and then palettize them based on this sortation.

* Truck the catalogs closer to the end reader by delivering them — on the same truck as other catalogs to save money — to the Bulk Mail Centers (BMC) and Sectional Center Facilities (SCF).

All of these processes, plus plate making, shipping bounceback copies to your offices and other miscellaneous charges, get line items on your price quote. 

Which is why I say that it’s a good idea to make friends with your printer. 

Seriously, a good printer rep will be looking to mail your catalog in the most efficient way possible. Work with it to determine the most efficient trim size and number of pages.

Catalog postal rates are determined by the weight of the catalog. Also, since catalog printers have different press efficiencies, ask yours whether plates of eight, 12 or 16 pages work better. Also, ask which trim size fits its presses for the best pricing.

Once you’ve discussed all of the possibilities with your potential printer, have it take the quote and put it in a spreadsheet, projected out by the amount of catalogs you’re planning to mail. I regularly plan out an entire year in advance, but for the purposes of long-range planning, I’ve had printers develop print models for three to five years out.

When getting print quotes from multiple vendors, take the first quote you get and use that as a standardized form. Get each printer to follow the same format.

As always, please feel free to fire off a comment using the form below.  For more info see next weeks article.

Jim Gilbert is president of Gilbert Direct Marketing and a professor of direct marketing at Miami International University of Art and Design. He can be reached at jimdirect@aol.com